Enforcement action begins against Sir Philip Green over BHS pensions
3 November 2016
Sir Philip Green faces being forced to pay towards BHS pensions because an official watchdog has yet to receive a "sufficiently credible and comprehensive offer" to plug a £571 million black hole in the scheme.
The Pensions Regulator has begun enforcement action against Sir Philip and serial bankrupt Dominic Chappell, to whom the retail tycoon sold the firm for £1, "to seek redress on behalf of the BHS pension schemes".
It sent warning notices to Sir Philip and his holding company Taveta, as well as Mr Chappell and his firm Retail Acquisitions Limited.
The notices set out evidence to support the use of the regulator's powers to demand a "specified sum of money" and to "put ongoing support in place for a pensions scheme".
The regulator said that following a "complex investigation" it issued the notices, each of which runs to more than 300 pages and sets out the arguments and evidence as to why the watchdog thinks Sir Philip and Mr Chappell should be liable to support the BHS pension schemes.
Pensions Regulator chief executive Lesley Titcomb said: "We have been clear in our public commitment to make significant progress by the end of 2016 and the issue of these notices meets that commitment.
"Our decision to launch enforcement action is an important milestone in our work to attain redress for the thousands of members of BHS schemes who have been placed in this position through no fault of their own.
"Issuing warning notices at this time reflects the outcome of our investigations and that we are yet to receive a sufficiently credible and comprehensive offer in respect of the BHS schemes.
"We continue to pursue the best deal for members of the BHS pension schemes. If parties wish to approach us with settlement offers, that course remains open to them."
It stressed the warning notices sent to Sir Philip, Taveta Investments Limited and Taveta Investments (No. 2) Limited are different to those issued to Mr Chappell and Retail Acquisitions Limited.
The move was welcomed by MPs, who said the regulator had “lost patience” with Sir Philip’s “empty promises”.
Commons Work and Pensions Committee chair Frank Field said: “We are not surprised that the Pensions Regulator has, like all the rest of us, lost patience with Sir Philip Green’s excuses and empty promises.
“His answer throughout our inquiry was always that he was going to ‘sort’ the disastrous position he left the pension fund in when he sold off BHS to Dominic Chappell for £1.
“We are glad to see TPR (the Pensions Regulator) is now calling his bluff and instigating enforcement proceedings.
“It seems clear Sir Philip would rather kick the can down the road and avoid responsibility than come up with any fair, sustainable settlement for BHS pensioners.”
Commons Business Committee chairman Iain Wright drew attention to Sir Philip’s lifestyle while backing the Pension Regulator’s decision.
He said: “In June Sir Philip told us he would sort out the pensions mess at BHS.
“Five months on, we’ve seen Philip Green sunning himself on his yacht – his third – but no credible plan or cash on the table.
“He is meant to be able to do deals quickly but he hasn’t been keen to do a deal which would quickly end the misery for thousands of BHS pensioners.
“Sir Philip said he would sort it but he has not yet been true to his word.
“He has not come up with the money to satisfy the regulator, who has clearly and quite rightly now lost patience with his obviously empty promises.”
The move comes after MPs unanimously recommended Sir Philip be stripped of his knighthood.
In a debate last month, he was labelled a “billionaire spiv” and compared to Napoleon as MPs lined up to criticise his role in the retail chain’s demise.
They asked the Honours Forfeiture Committee to ensure Sir Philip’s knighthood is “cancelled and annulled”, with the move viewed by one former minister as part of the businessman’s “humiliation”.
The Government also called on Sir Philip to “quickly” remedy the BHS pension scheme deficit.
Shadow business secretary Clive Lewis said: “Four months after Sir Philip Green promised to make good the pensions deficit created by his shoddy management of BHS, and weeks after MPs voted unanimously to strip Green of his knighthood, tens of thousands of pensioners are still waiting to find out the fate of their pensions.
“Let’s hope that, by stepping up their investigations, the Pensions Regulator will finally hold Philip Green to account and give those pensioners the security they deserve.”
Sir Philip and Mr Chappell will now have a specified period of time to respond to the notices.
The regulator’s case teams will then consider these before passing the case to its determinations panel.
The panel, which operates at arm’s length to the case teams, will then decide whether to exercise the regulator’s powers to compel payment.
Sir Philip told Sky News he has given the Pensions Regulator what he believes to be a “credible and substantial proposal with evidence and bank confirmation of cash availability” which “would prevent the scheme from entering the Pension Protection Fund”.
Steve Webb, who was pensions minister in the coalition, said the government did not believe Sir Philip “was in a good place” with the pension scheme in 2012.
He told the BBC Radio 4 Today programme: “He came in and said ‘You don’t need to worry about the BHS pension scheme, I’m good for the money. You are asking me for this levy, this insurance because you think I’m a bad risk. I’m not, will you cut the levy?’
“And we said no, because we weren’t convinced he was in a good place.”
Photo from John Stillwell / PA Wire